At the company’s last shareholders’ meeting, last Saturday, Buffett revealed that the group sold shares worth 13.3 billion dollars and, at the same time, invested 4.4 billion in the repurchase of its own shares.
The legendary investor Warren Buffett, Chairman of Berkshire Hathaway, he is considered a visionary when it comes to investment strategies. At the company’s last shareholders’ meeting, last Saturday, Buffett revealed that the group sold shares worth 13.3 billion dollars and, at the same time, invested 4.4 billion in the repurchase of its own shares and placed another 2.9 billion in other values. What does it mean?
Steve H. Hanke, a professor of applied economics at Johns Hopkins University, explained that Berkshire’s move indicates that Buffett, whose famous ability to guess the state of the market has earned him the nickname of the Oracle of Omaha, he is once again very insightful about the state of the US economy.
“Warren Buffett’s sale of billions of dollars in US stocks indicates that he correctly anticipates that a US recession will hit in the near future”explains Hanke, in statements made to Newsweek.
“Economic activity will worsen. When a recession is around the corner, Buffett knows that cash is king, especially when he can earn a decent interest rate on it,” Hanke warns.
David Nicholas, president and founder of Nicholas Wealth Management, recalls that “The big three risks for Buffett are China, the US banking sector and real estate. These are very real risks to economic growth and just one would be enough to derail growth, but we are dealing with all three at the same time,” Nicholas told Newsweek.
Berkshire invests most of its $130.6 billion of cash in Treasury Bills and short-term bank deposits, a sign that the company has benefited from the higher interest rates imposed by the US Federal Reserve.
Source: Ambito
